LONDON: Sterling slipped on Thursday as investors ditched riskier assets in favour of safe havens such as the yen, concerned that Britain will vote to leave the European Union at a referendum in just two weeks' time.
Worries over a possible Brexit have dominated since late last year, driving a more than 10 percent fall on a trade-weighted basis between mid-November and mid-April.
While it has recovered from April's lows, up 3 percent in the past two months, sterling continues to be buffeted by concerns that a vote to leave would leave Britain short of the investment it needs to fund a huge current account gap.
With so much uncertainty over both the result of the June 23 referendum and the consequences of a vote to leave, economic data in the run-up to the vote has had less impact than normal.
Figures showing Britain's trade deficit narrowed more than expected in April, with a record monthly jump in goods exports, which offered a hint that a weak recent trade performance may be turning a corner, did little to boost sterling.
"At the moment, the FX market is losing its risk appetite ... and given that the Brexit risk is one of these big hurdles out there for the market and for risk appetite, in this environment sterling would do badly," said Rabobank currency strategist Jane Foley.
"I think we're going to have very jittery markets over the next couple of weeks in the run up to the vote."
Sterling slipped 0.3 percent to $1.4468. Against a yen surging amid subdued risk appetite across markets, the pound fell over 1 percent towards an eight-week low.
Against the euro, sterling inched down 0.2 percent to 78.715 pence.
The latest betting odds on website Betfair show the implied probability of a British vote to stay in the European Union have risen to almost 76 percent on Thursday. That is up from an implied probability of around 72 percent of an "In" vote earlier this week.
Opinion pollsters have so far painted rather contradictory pictures of how Britons will vote.
"The pound should remain driven by Brexit-related uncertainty," wrote Credit Agricole strategists.
"We stay of the view that the pound will continue to trade within this year's trading range. While elevated short positioning should prevent the currency from depreciating more considerably ... uncertainty as when it comes to the possibility of a Brexit should keep demand for the currency low."
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